The Failure of Laissez Faire Capitalism and Economic Dissolution of the West Kindle Edition

The Failure Of Laissez Faire Capitalism And Economic Dissolution Of The West by Dr. Paul Craig Roberts - formerly Assistant Secretary of the US Treasury for Economic Policy - is a fundamentally important work about the dramatic changes that are taking place in the US and world economies. For this reason, I translated the book into German in the spring of 2012 for its publication by Weltbuch (Dresden) in July 2012 (German title 'Wirtschaft am Abgrund - Der Zusammenbruch der Volkswirtschaften und das Scheitern der Globalisierung'). Economic and political developments during the past year have given the book even greater significance.

Roberts describes the social, political, and economic dispossession that is occurring throughout the West. The citizens in the Western democracies are being forced into acceptance of the agenda of a small oligarchy of powerful private interests. The "free" media, "democratic" governments, and most economists serve the ruling private interests. Let's face it: Private power can be just as abusive as public power. The worst-case scenario is when both are working hand in hand, what, in fact, is happening in the Western democracies today.

Economic theory based on "empty world" economics cannot deal with the problems of a "full world" economy. A mistaken understanding of free trade has blinded the West to its economic erosion by jobs offshoring--labor arbitrage that substitutes lower paid foreign labor for the higher wages in developed countries, with the result that Western economies are deprived of employment opportunities, tax base, and real GDP growth.

Contrary to government claims and media reports, the U.S. economy is still in a recession. A real recovery is not in sight. The recovery exists only in the official measure of real GDP, which is deflated by an understated measure of inflation, and in the U.3 measure of the unemployment rate, which is declining because it does not count discouraged job seekers who have given up looking for a job. No other data series indicates an economic recovery. Neither real retail sales nor housing starts, consumer confidence, payroll employment, or average weekly earnings indicate economic recovery. Consumer real income in the US is stagnant or falling, and consumers are too indebted to be able to take on yet more debt with which to finance their spending. In the absence of growing consumer demand, an economy dependent on consumer demand cannot advance.

The ongoing debt monetization in the amount of one trillion U.S. dollars annually by the Federal Reserve threatens the dollar's role as world reserve currency. The real estate and derivative bubbles that produced the financial crisis have been replaced by bond, stock, and currency bubbles.

In Europe the "sovereign debt crisis" is being used to subvert democracy and the independence of the individual member countries that constitute the European Union. The common currency is being used to centralize the budget policies of the separate countries, thus stripping them of their sovereignty. Governments of heavily indebted members of the EU, such as Greece, are being forced to extract resources from their hard-pressed populations in order to ensure that the private banks that over lent to governments suffer no losses.

Formerly, the policy was for banks to write down sovereign debt that cannot be paid; today the policy is to extract the resources from the population by cutting wages, pensions, social services, and selling the country's public assets to private interests. To stabilize the situation, German income will be tapped to provide transfer payments to alleviate the suffering of the Greek population that is being looted for the sake of the profits of private banks.

Roberts makes it clear that we are experiencing a turning point in history as Western peoples are being enserfed.

The economies of the US, UK, and EU are in a process of dissolution. For a decade, Roberts has been warning against the fatal consequences of the erosion of goods producing industries in the United States. Offshoring - the relocation of production of goods for domestic markets to low-wage countries in order to profit from labor arbitrage between different wage levels in different countries - has already destroyed millions of middle class jobs in the United States. The ladders of upward mobility in the American "Opportunity Society" have been dismantled by "globalization."

The centralization of power in the US in the hands of an increasingly unaccountable executive branch is matched in the EU by the increasingly dirigistic policies of EU politicians.

Roberts warns the Germans not to terminate their sovereignty by agreeing to turn their governance over to a central government in Brussels. Instead, Germany should resign from the EU, re-establish the D-Mark, and enter an economic alliance with resource-rich Russia. Such a cooperation, in which the states would keep their economic sovereignty and separate currencies, would create an economic bloc consisting of Germany, Russia, Eastern and Central Europe and would eventually draw in Western Europe. This development would break up NATO, an organization whose purpose ended with the collapse of the Soviet Union. Today NATO functions as a military auxiliary to Washington's drive for hegemony, thus enabling the numerous wars and military operations that Washington has launched in the 21st century.

The English international edition of The Failure of Laissez Faire Capitalism and Economic Dissolution of the West - Towards a New Economics for a Full World, became available as an e-book on March 1, 2013. Nomi Prins calls the book "a compelling gift," and Michael Hudson wrote, "In his inimitable way, Roberts describes how the rhetorical patter talk about free-markets is a cover story for the horror of an extractive asset-stripping operation by publicly-supported private banks and the governments that they control that impoverishes people and the environment."

If you want to understand what really is happening, read this book. No clearer or more accurate account exists.

I recommend this book to anyone who wants to understand how we as a society got to where we are now, both economically and politically. This a well documented exposition of how we went from being a democracy to a kleptocracy in the few short decades since Nixon closed the "gold window" in 1971. The wealth is now systematically transferred from the 99.9% to the .1%. Political structures have been implemented to undermine the constitution so the banksters will be able to defend themselves with police and military might should the people get fed up with the ongoing theft. He spends a lot of time documenting how globalization has intentionally off-shored a large portion of manufacturing and other high tech jobs and work visa programs have been implemented so that foreign workers can come in and under cut American workers to improve the profits for corporations. The only segments of the work force that are largely immune are waiters, bartenders, retail clerks, and some health care providers. The informed reader will already be aware of most of these trends, but Roberts provides detail to fill in the blanks on how it has been accomplished so seamlessly, with nary a whimper from the public. They continue to tell us the economy and the jobs picture is improving. What they don't tell us is that the middle class is being gutted and the income disparities continue to widen with each passing year. I think all Americans should read this book as a civic duty.

PCR is a great patriot and a "refreshing drink of water" in this waste land of highway robbers who masquerade as honest men! How sad that our predatory species has brought ruin to this world. We are the only species that destroys the environment that supports us. I think it's called greed, and it's a design flaw in our creation, one that will cause our demise.
One thing is for sure, Paul Craig Roberts is The Lone Ranger, but he is totally out gunned! It's time to run for the hills partners, PCR has created the "smoke signals" and it's time to get out of Dodge!

As a citizen of a "third world" country, I read this book with great interest. Dr. Roberts made a wonderful job in his description of what is happening and why. We all can see the results of the so called "globalism", but maybe the scheme behind it, is not clear for many of us... Well, Dr. Roberts is crystal clear in his presentation of the problem and its origination. It is a conspiracy not only against "first world" jobs, It is a conspiracy against the middle and working class at a global level. We poor little countries do not even bother to talk about sovereignty,..we had already forgot the meaning of this word...
On the other hand, it is nice to know that big and rich countries can not lecture us about the moral need to fight corruption...they have their own homework to do...

This is a thought-provoking, sobering, even pessimistic book -- or maybe just realistic and open-eyed? For someone like myself who is not economics savvy, some of the background is a bit of a stretch -- micro and macroeconomics, and the big names in the field about whom associations should be clear. No matter, the gist of Roberts's argument is clear enough: off-shoring has nothing to do with free trade and has destroyed the economy of the West. The question left in the balance, however, is what now? The forces at work seem insurmountable and the outlook bleak. Germany opting out of the euro (Roberts's suggestion) doesn't help the US. Of course, it's not Roberts's responsibility to solve the mess that has been created, but all the same a ray of light would have been nice. If there's any to be found in the book, it's probably this -- to find a way out, you have to see things clearly. The viewpoint here looks clear enough to me.